Malaysia Properties

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#1
M'sia home prices at 5.5 times of median income
Khazanah Nasional survey finds the figure above that for Singapore, US and the UK

By
Pauline Ng
Khazanah cites high profit margins as one reason for the high relative housing prices. Developers contend that home prices are not exorbitant given inflationary pressures, and that the main problem is Malaysia's wages have failed to keep up with living costs. PHOTO: BLOOMBERG
21 Nov5:50 AM
Kuala Lumpur

IN median income terms, the average home in Malaysia costs more than in Singapore, the US, the UK or Ireland - one reason being the hefty profits made by builders, according to a survey by Khazanah Nasional.

If affordable housing should cost three times annual median income, average prices in Malaysia are much higher at 5.5 times. In comparison, Singapore's housing prices are 5.1 times and the UK 4.7 times, its research institute's "The State of Households" reveals.

At 14.9 times, land scarce but heavily populated Hong Kong occupies a tier by itself, its stratospheric home prices famous the world over.

"In median terms, our houses are more expensive than those in Ireland and even Singapore," the not-for-profit organisation observed in its inaugural publication which was launched this week. Based on a median income of RM3,626 (S$1,400), it calculated that it would take the average Malaysian 57 months to save the 10 per cent deposit (in a housing account of the pension fund) on a RM130,000 home (based on three times annual median income).

On top of other expenses, a 25-year loan at 4.45 per cent per annum, would lead to a household's loan instalment payment amounting to nearly 18 per cent of household income.

The Irish, however have enviable housing affordability. Ireland's housing prices were only 2.8 times annual median income; for the US, it was slightly higher at 3.5 times.

"At 21 per cent, the profit margins of our property developers are high - almost 2x those of the US (12 per cent), 1.2x those of the UK (17 per cent) and higher than Thailand (14 per cent), although Singapore has higher margins (25 per cent)," said the institute which believes households should be at the centre of economic policy. It aims to undertake data-driven analyses and research on the pressing issues of the nation and based on the research, provide actionable policy recommendations.

While it is working on the appropriate policy response to housing affordability, it said that the answers lie in reforms of the construction supply chain, land market price setting and land regulations; innovation in building technology and finance; and the provision of affordable housing by the government and private sector.

Even though many countries are grappling with the issue of affordable housing, builders point to the myriad of issues affecting Malaysia including housing quotas for bumiputras who are given discounts regardless of their wealth. Ultimately, they say, home buyers are saddled with the additional costs, which continue to add up as additional requirements are put on builders, including the construction of a certain number of low-cost homes and the infrastructure for utilities.

In truth, one would be hard pressed to find a RM130,000 home as in the bigger cities, affordable homes are now closer to the RM400,000 mark. Moreover, in the primary market, buyers still buy off the plan as efforts to implement build-then-sell have not yielded any results.

Developers contend that home prices are not extortionate given inflationary pressures, rising labour and material costs and regulatory requirements, and that the main problem is Malaysia's wages have failed to keep up with living costs.
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#2
Same everywhere now, loose credit and debt fueled housing booms. Msia has pretty high national debt too, no surprise housing is expensive

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#3
Msian is like a Ah Siah Kias living off the inheritance. When the (oil & gas) money runs dry, they will be in trouble.
By then, the elite will be the zombie in 'The Walking Dead", will feed on their own kind.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#4
Yes the normal unleaded 95 price was increased whilst the expensive 97 premium price decreased. Good news for sg cars goin' into JB though.

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#5
with singapore developers coming in to build more new developments, prices of land with get higher. Good luck to their next generation!
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#6
frankly speaking, i am doubtful about Iskandar project. Supplies seems not moderated by policy.

In a limited demand scenario, this will not be healthy for the property market in JB


*just my 2cents worth of comments
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